Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
The co-operative says the closure of the Canpac site follows its decision to focus on higher value ingredients such as advanced proteins and medical nutrition.
The plant currently packs up to 4,000 metric ton of powders per year, less than 1% of the co-op's total product volume.
Fonterra's chief operating officer Anna Palairet says the co-op is committed to supporting the impacted employees.
The co-op is working through a consultation process, including exploring potential redeployment opportunities before operations are planned to come to an end on July 31.
Palairet says low product volumes and increasing complexities in production has created challenging economic conditions for the facility.
"It's been a tough day for all the team at the site. Making decisions like this is never easy.
"Our strategy is about creating end-to-end value and growing total returns for our farmer shareholders.
"We believe the best way to achieve this is to focus on our strengths and scale in ingredients and foodservice, and we are prioritising our investment on the parts of our operations that are better suited to this."
